Auriga Starts DSW Inc. (DSW) at Buy

Auriga initiates coverage on DSW Inc. (NYSE: DSW) with a Buy. PT $55.00.

The firm comments, "There are three reasons why we believe DSW will be an outperformer over the next twelve months. First, we believe strong footwear sell-through continues into Q3 and DSW is well-positioned to capture discretionary spending on hot footwear trends like boots and booties. Second, management guidance for 2H11 is conservative, with comps guided to +1-3% versus strong double-digit comps reported in Q2. Therefore, we believe upside to current estimates is likely. Lastly, we believe DSW is a best in class retailer with multiple growth opportunities ahead, including opening stores in new markets, expand into smaller markets, begin selling kids shoes and opening DSW.com to Canadian customers. Our $55 PT assumes 16.5x our 2012 EPS."

For more ratings news on DSW Inc. click here and for the rating history of DSW Inc. click here.

Shares of DSW Inc. closed at $46.09 yesterday.

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